topic When I upload my 1099-B transactions (sales and redemptions), Turbotax is not identifying these as US Treasury securities for state tax purposes. How do I fix this? in Get your taxes done using TurboTax

When I upload my 1099-B transactions (sales and redemptions), Turbotax is not identifying these as US Treasury securities for state tax purposes. How do I fix this?

bradsauve — Fri, 27 Feb 2026 21:42:46 GMT

Re: When I upload my 1099-B transactions (sales and redemptions), Turbotax is not identifying these as US Treasury securities for state tax purposes. How do I fix this?

baldietax — Fri, 27 Feb 2026 22:31:45 GMT

if you're referring to Accrued Market Discount on discounted Treasury Notes, these get adjusted on Form 8949 and reflected as ordinary income on Schedule B, but there is no automatic state subtraction for this income like 1099-INT Box 3 or 1099-DIV Box 1a US Gov Obligations. This has been a long running topic through the rate hike cycle, lots of old threads on this, no doubt this will bubble up here again.

It depends whether your state regards these as state tax exempt, which varies in the language and interpretation of the state tax code, NC courts for example explicitly ruled it's taxable. If you've determined your state exempts this income then there is usually the ability in the state tax return to add a manual subtraction to income. But some states have different reporting requirements and this sort of adjustment precludes e-file for NY for example, if I recall correctly.

Re: When I upload my 1099-B transactions (sales and redemptions), Turbotax is not identifying these as US Treasury securities for state tax purposes. How do I fix this?

bradsauve — Mon, 02 Mar 2026 13:48:07 GMT

It’s exempt for my state. Ridiculous that TurboTax can’t provide a way to identify these as US treasuries. I had to skip e-filing for the state ( which I already paid for), manually fill out the state forms with the correct figures, and mail them in. Next year, I’ll just do the state returns on my own instead of paying TurboTax.